Superannuation

Superannuation

January 26, 2010

For 20 years we have had employer-contributed compulsory superannuation (ECS), currently at the rate of 9% of gross income. This was “sold” as part of the social wage and as an expansion of the provision of enhanced retirement benefits for Australian workers beyond those then limited to public sector and management in the private sector. It is another example of the ALP-ACTU Accord betrayal of Australian workers.

Workers, in negotiating their terms of employment, sacrificed wage increases in exchange for employer-contributed superannuation incrementally increasing to the 9% that exists today.

It should be noted that the Australian Office of Taxation, as the administrator of the ECS, has failed miserably to enforce this provision on employers and many workers, particularly casual workers, as are an ever-increasing percentage of the workforce, are being robbed of their super entitlement.

Given the name “Superannuation Guarantee” it is anything but a “guarantee” other than a guarantee that as a worker you will “lose your money”. The promise of the ACTU in negotiating this employment “benefit” has failed to meet expectations.

Initially, when introduced, with Union-Employer Industry Superannuation Funds being established all looked rosy. Especially for the ACTU executive members and senior union officials who found seats for themselves as well-remunerated trustees of these funds. A former right wing assistant secretary of the ACTU Gary Weaven is still the CEO of the “Industry Super Funds Association”. You’ve seen their ads on TV accurately extolling the superiority of their funds over those provided by the non-union finance industry version.

As is well appreciated, the regulatory system imposed on the finance sector in Australia would be laughable if it wasn’t such a cruel fraud. The super funds of Australian workers have been purloined by the finance industry as a lucrative source of commissions and charges, suffering poor investment strategies and likely negligent or criminal behaviour on the part of those charged with administering their funds.

Paul Keating as Treasurer had teased us all with the prospect of the national cumulative pool of super funds being licensed by legislative exemption to be used at a lower than market interest rate to be used for national infrastructure investment. This has never happened.

The election of the laissez-faire Howard government didn’t help but witness the behaviour of Rudd’s finance minister Lindsay Tanner recently offering our national “Future Fund” to the “market” on its terms free from government “interference” or oversight.

Score: People nil — Oligarchs 1.

It has become evident that the value of our super fluctuates wildly from year to year, depending on the state of the capitalist economy. In times of crisis, super funds suffer huge losses, and hence are not a reliable source of income for retired workers. The capitalists gamble with our money, and we suffer both from the poor decisions of particular capitalists and from the irrationality of the system as a whole.

Workers sacrificed cash-in-hand for what for many has become the chimera of an income in retirement. The superannuation guarantee is no guarantee at all. The greedy, profligate “Super Industry” is even lobbying hard to get the percentage increased to 12%!

Since government mandates the payment and collection of 9% of workers wages in super funds, government should guarantee that the indexed value of those contributions are maintained. If private banks can be given government protection, then Australian workers should expect nothing less.

This requirement may even motivate government to regulate this industry stringently. At the moment it’s a thieves picnic.

As the mid-wife of this fraud the ACTU has a responsibility to act to protect Australian workers from being exploited by finance capital.

Trillions of dollars are at stake here. Workers’ funds are being squandered by a privileged minority.

Socialist Alliance policy:
  1. An adequate national retirement “pension” should replace workplace and voluntary superannuation. All would enjoy this entitlement, commensurate with their individual needs and social responsibilities.
  2. As an interim measure the current super scheme needs to be tightly regulated to minimise the incompetence and profiteering we are witnessing.
  3. Within 12 months only union-industry super schemes will be licensed to operate with workers constituting 75% of the trustees of each Fund.
  4. National legislation will provide a government guarantee of the value of all worker contributions and protecting the real value of their wages that have been committed by law to superannuation.
  5. National legislation will provide preferential access to a pool of the combined super funds as social capital for workers’ housing (the Socialist Alliance will legislate in government for the elimination of Australia’s housing debt, investing superannuation socially to achieve this), public education, public health, and other social, environmental and economic investing of benefit to the working class. Further, we will establish, and ask all governments within the Federation to support, a Public Social Partnership (PSP) to build the new, needed, green housing stock.
  6. The trade union movement and fraternal political groups be encouraged to take up this issue as a matter of urgency.
  7. All superannuation funds adhere to the UN Ethical Sustainable Guarantee and be proactive in Principals of Responsible Investment in filtering companies not meeting the UN PRI. This includes all investment funds offering the individual shareholders company AGM voting or proxy rights in the shares owned.
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